The economic landscape in 2022 is a lot brighter for Saskatchewan as compared to 2021 according to an RBC provincial outlook.
Saskatchewan is set to lead the nation with a change of 5.6 percent in the GDP.
RBC Economist Robert Hogue says a reason for the growth in 2022 is because of the slower than expected economic recovery in 2021. “There have been a number of factors that have restrained activity, the drought this summer is a major factor that held back agricultural production so we’re expecting by 2022 things are going to look better on that front.
A strong demand in exports is another for the growth in Saskatchewan. A strong demand for potash with tight supply along with high prices will provide potash producers opportunities to expand their production.
Capital spending is set to increase with the announcement earlier this year that BHP will go ahead with the construction of the Janzen Potash Mine.
With around 70% of the oil rigs operating in the province, RBC says that the oil and gas drilling season is off to a good start, along with increased activity, producers healthier cash flow position from the significant run up in oil and gas prices points to a rise in production in 2022.
Hogue says that with Saskatchewan’s slower than expected recovery in 2021, it allows for more growth in 2022. While other provinces will run into capacity issues like Quebec and B.C. are currently are with their labour shortages. “Saskatchewan’s economy is not that far into this recovery and will not have the same issues at least to the same degree as other provinces.
The housing market will remain strong in 2022 but it will continue to slightly trend down like it did the past year according to Hogue. He added that the increased economic activity in Saskatchewan will offset any decline that may arise with a dip in the housing market.